IREN Limited Secures $9.7B Microsoft Power Capacity Deal for 200MW, Aims at $20B ARR
IREN announced a $9.7 billion contract with Microsoft to supply 200 MW of power capacity, leveraging its pre-secured West Texas grid interconnections and land for rapid AI data center buildout. The deal positions IREN to reach $20 billion in annual recurring revenue within 5–10 years, boosting its vertically integrated AI compute model.
1. Secured Power Capacity and Expansion Pipeline
IREN has pre-secured 2.8 gigawatts of grid interconnection capacity and 10,000 acres of land in West Texas, giving it one of the largest footprints for rapid deployment of AI data centers in the region. These sites benefit from turn-key power approvals and high-voltage transmission lines already in place, allowing IREN to bring up to 1 GW online within 12–18 months of groundbreaking. By the end of 2025, the company expects to have at least 800 MW operational across two campuses, with site preparation for an additional 1 GW underway.
2. Financial Projections and Revenue Drivers
Management forecasts net income of $2.3 billion by 2029, largely driven by 3 GW of operational AI data centers plus contributions from its legacy cryptocurrency mining operations. For fiscal 2026, IREN is targeting $3.4 billion in annualized run-rate revenue, anchored by a $1.9 billion annual recurring revenue contract with Microsoft for 200 MW of dedicated power capacity. With an expected project-level EBITDA margin of approximately 85%, the company anticipates sustaining free cash flow exceeding $1 billion annually by FY26.
3. Strategic Partnerships and Market Position
In late 2025, IREN secured a 10-year, $9.7 billion power capacity agreement with Microsoft, underscoring its role as a preferred AI compute partner for hyperscalers. The deal covers 200 MW initially, with options to expand to 400 MW. Coupled with discussions for a second multi-year agreement with a leading cloud provider, these partnerships position IREN to reach upwards of $20 billion in annual recurring revenue within the next 5–10 years. At a current enterprise valuation of $16 billion, investors see potential for significant upside compared to larger peers with more saturated pipelines.
4. Recent Stock Volatility and Catalysts
After skyrocketing from single-digit levels to over $75 per share in early 2025—driven by AI demand expectations—IREN retraced much of its gains in the second half of the year as markets repriced speculative data center projects. With four power sites now under construction and visibility on two major ARR contracts, upcoming catalysts include first-quarter FY26 operational updates and the closing of a third hyperscaler agreement. Positive execution on these fronts could drive a revaluation and renewed investor interest.